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Medicare Supplemental Insurance Companies

Medicare supplemental insurance companies help seniors improve their financial situation and gain peace of mind by offering additional insurance to pay for expenses that the original Medicare plan cannot cover. Medicare supplemental insurance is often called Medigap because it "fills the gaps" in your coverage, taking care of your coinsurance, blood work and, in some cases, services that Medicare does not cover, so you don't have to dip into your savings. As a federal program, Medicare can only cover 80 percent of the approved cost of services it offers, leaving a 20 percent coinsurance fee. At the very minimum, Medicare supplemental insurance policy companies must cover your coinsurance. Depending on your policy, Medigap companies can also cover deductibles, excess charges, hospice care, foreign travel emergencies and other services.

Types of Supplemental Insurance Companies

Medicare supplemental insurance companies can vary by size, approach, number of policies offered and customer service. Thoroughly researching companies before you purchase one can you find the right supplemental insurance policy for you. Fortunately, some aspects related Medigap policies will be steadfast, saving you time as you investigate companies. Plans themselves, for example, will not change from company to company. Medigap is available through 10 standardized plans, labeled Plan A through Plan N. Each plan is approved and standardized by the federal government, so the benefits must be uniform across all Medicare supplemental insurance companies. Companies do not have to charge uniform rates, however. In fact, the methods by which Medicare supplemental insurance companies determine rates is one of the biggest ways they differ.

Supplemental insurance providers can choose one of three ways to determine rates for seniors based on their age. The first, called community-rated, offers the same rate to everyone within a particular plan, regardless of age. Under this plan, it doesn't matter if you are 65 or 85, you will pay the same rate. Your rate may go up slightly each year to keep pace with inflation. The second way that Medigap providers can use to determine rates is the issue-age-rated method. This method allows you to lock in a rate at the age that you purchase your policy and keep that rate as long as you keep your plan and remain with the same company. So if you purchased your policy at age 65, you can keep your rate, adjusted by inflation, as long as you live. Your 73-year-old neighbor will have a different, likely higher rate when she enrolls, but will be able to keep her rate as she gets older.

The third method that Medicare supplemental insurance companies can use to determine rates for seniors is the attained-age method. Under this method, your rate is determined based on your age, so no matter when you purchase your policy, or how long you've been with a particular company, your rate will be raised slightly each year in addition to inflation. The attained-age method is often a good option for seniors who are switching plans or have changing health needs. Knowing how companies in your area determine rates can help you make the most informed decision regarding your supplemental health care. Online research is one of the most convenient and cost effective ways to do this.

Choosing A Supplemental Insurance Company

When it comes to choosing the right provider to supplement your Medicare plan, there are several characteristics to consider. Low rates might play a factor, although a company with excellent customer service might be worth a higher premium. Since changing your plan or enrolling outside certain time frames can be difficult, choosing a provider that is willing to get to know you and help you when you have questions can be a greater value than lower rates at a larger provider.

There are also advantages to choosing a local company. Since Medicare supplemental insurance companies can charge different rates to seniors in different zip codes, local providers often offer the best value. Another factor to consider when looking for the right Medigap provider is the plan you choose. By law, the only plan that Medigap providers must offer is Plan A. Beyond that, the policies they choose to offer is up to them. Researching firms ahead of time can ensure that you find one that offers your preferred policy.

Investigating Medicare supplemental insurance companies can seem like an overwhelming task at first, but the more you learn about different policies and providers in your area, the more confident you will be when you look to purchase one. Researching Medicare supplemental insurance companies is a great way to examine all your options and compare rates, customer service and policies offered. Your health care is one of the most important considerations you'll have in your golden years, and supplementing your Medicare can give you the peace of mind that your medical expenses are covered.


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